The Hawai’i Housing Finance and Development Corporation (HHFDC) is making applications available for $20 million in Mortgage Credit Certificates (MCC) to first-time home buyers of low to moderate income.

The MCC program, authorized by Congress in the 1984 Tax Reform Act, reduces the amount of federal income tax, allowing more available income to qualify for a mortgage. With a MCC, 20 percent of the annual mortgage interest is a direct dollar-for-dollar federal tax credit, while the remaining 80 percent continues to qualify as an itemized tax deduction.

MCC’s are only available through participating lenders and can be used in conjunction with a conventional fixed rate, Federal Housing Administration, Veterans Affairs or privately insured loan. A MCC however, cannot be used in conjunction with a Hula Mae loan.

Certain restrictions apply. Purchase price limits vary by county and type of residence, and income limits vary by county and family size. The MCC recipient must occupy the property as their primary residence and cannot have had an ownership interest in a principal residence at any time in the last three years.

The mortgage must be a new loan and not a refinance. For more detailed information on the MCC program and a list of participating lenders, contact Darren Ueki, HHFDC Finance Manager, (808) 587-0586 or visit the HHFDC web page.

*The contents of this post taken from Hawaiian Association of Realtors (HAR) 2008.